‘Gridlock’ as Europe watches nervously

Anti-austerity vote provokes unease in Germany

ROME, Feb 27, (Agencies): Italy’s political gridlock deepened on Wednesday with bickering between the main leftist party and a new antiestablishment party putting off the prospect of a new government any time soon, following shock elections that have spooked Europe.

Comedian turned populist firebrand Beppe Grillo said his Five Star Movement (M5S) would not endorse the Democratic Party (PD), which won the most votes in the elections on Sunday and Monday but not enough to form a majority in parliament.

“The M5S is not going to give a vote of confidence to the Democratic Party or to anyone else,” Grillo, who has channelled the frustrations of austerity-weary Italians, wrote on his blog.

The comment appeared to be a rejection of overtures from the PD, which on Tuesday held out the possibility of working with M5S on key reforms like slashing government costs and helping Italy’s poorest get through a grinding recession.

Grillo said the PD had made a series of “indecent proposals”, prompting PD leader Pier Luigi Bersani to hit back with a statement saying: “If Grillo has something to say to me, including the insults, I want to hear it in parliament.”

Grillo has railed against traditional politicians and has called for a referendum on the euro. His party won 163 seats in the lower and upper houses.

Panic

After market panic on Tuesday, investors were more measured on Wednesday, especially after a betterthan-expected bond sale even though Italy’s borrowing costs spiked.

European capitals remained nervous however amid fears Italy could turn back the clock on reforms and austerity following an election that had been seen as crucial for the future of the eurozone.

Government officials such as Foreign Minister Guido Westerwelle have called on Italy to continue on the path of reform pursued by outgoing Prime Minister Mario Monti that led to improved confidence in the financial markets.

“The outcome of the elections was even more confusing than we had anticipated,” the Mediobanca investment bank said as Moody’s warned it might downgrade Italy’s debt rating, saying the vote result “increases the risk of political paralysis and prolongs political uncertainty.”

Meanwhile, Italy’s anti-austerity vote provokes unease in Germany.

Germany failed to mask its unease Wednesday over Italy’s anti-austerity protest vote that has led to political deadlock, with calls for Italians to stay reform-focused and derisory digs in the media.

Dubbed an “anti-Merkel” result, the German chancellor has refrained from commenting publicly on the Italian elections’ outcome but two top-table officials stressed it was paramount for Rome to keep its reform course on track.

Merkel was, however, reported to have dismissed interpreting the Italian vote as a kickback against government austerity measures at a meeting of her conservative party Tuesday, according to participants.

“The government does not adhere at all to such one-dimensional explanations,” her spokesman Steffen Seibert told a regular government news conference the following day.

Also: Italian President Giorgio

cancelled a dinner with the German opposition’s chancellor candidate on Wednesday after he described Italian former premier Silvio Berlusconi and comic-turnedpolitician Beppe Grillo as “clowns”.

Peer Steinbrueck, a Social Democrat who will take on Chancellor Angela Merkel in Germany’s next national election in September, has a BERLIN: Napolitano reputation for gaffes and his remark created the first diplomatic incident of his accident-prone campaign.

Steinbrueck said on Tuesday he was “appalled that two clowns have won” Italy’s Feb. 24-25 election. The vote was actually inconclusive with no party garnering a majority in parliament, although Grillo’s anti-establishment party surged dramatically.

The German candidate’s spokesman said Napolitano cancelled “because of Steinbrueck’s remarks on Tuesday” and added that the SPD politician “understood Napolitano’s domestic political reasons for cancelling”.

Napolitano’s spokesman unavailable for comment.

Napolitano and Steinbrueck had been scheduled to meet over dinner at a Berlin hotel. Napolitano, who visited Munich on Tuesday and Wednesday, was due to meet Merkel in the German capital on Thursday.

Steinbrueck made it absolutely clear in his comments to an SPD rally in Potsdam he was referring to Grillo and Berlusconi, calling the latter “clearly a clown with a testosterone boost”.

“My impression is that two populists won,” he said.

Berlusconi, a scandal-ridden billionaire media mogul, is very unpopular in Germany and slated often in the media.

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